Posts Tagged ‘auto rebates’

Slow sales means big incentives on some vehicles, such as the Kia K900 which had $8,000 slapped on the hood to lure in buyers.

Automakers in the U.S. enjoyed a monumental month in June with double-digit sales increases seeming to be the norm as they reported the results.

The results were so positive at least one organization – the National Automobile Dealers Association – revised its expected sales number for 2015 upward to 17.2 million vehicles: a 200,000-unit jump.

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In order to keep that smoking hot sales pace, some automakers sweetened the pot for certain buyers. Hyundai was the leader of the pack on increased incentive spending with a 34.5% jump over last June and 5.6% spike from May. (more…)

The U.S. new car market finished 2012 with an unexpected sales surge and industry pundits predict demand will grow again this year. That may be great news for shareholders but not so much so for shoppers looking for a good deal.

Transaction prices – what the average new vehicle buyer actually pays after options and incentives are worked in – rose to a record high while those givebacks dipped sharply. But that doesn’t mean there aren’t some good deals out there, according to those who track the numbers on a daily basis.

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In fact, if you’re willing to opt for a product that might not be your first pick you could be in for some substantial savings. And there are some particularly good deals in select market niches. In some instances, you’ll find the bargains best when you’re willing to purchase the vehicle up-front. Other hot deals are available, however, on leases.

If you bought a car in November odds are you paid more than you would have at almost any time in the past year. Transaction prices – what motorists actually spend after working in incentives and factory options – are at or near record levels.

That’s despite the fact that many manufacturers increased givebacks last month, hoping to keep sales momentum going. They’ve also been working with lenders to ensure that credit continues to become more readily available – though motorists have been stretching out loans and are now taking an average of 64 months to pay off a car purchase.

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“Industry average transaction prices climb once again with consumers’ continued appetite for highly contended vehicles,” said Jesse Toprak, Senior Analyst at the data tracking service TrueCar. “Today’s consumers value a nicely equipped vehicle as much as they do a low cost of ownership. Automakers are getting better at providing all the modern conveniences consumers come to expect for more of their models, resulting in higher overall prices hence improved profitability.”

While a number of key automakers have yet to report their final numbers for August, there’s little doubt it was a strong month for the industry, likely bringing an overall sales increase of around 16%, year-over-year – a sharp contrast to the stuttering numbers from other sectors of the economy.

The August numbers are all the more impressive when considered in light of the fact that incentive spending continued to drop during the month – while transaction prices were up sharply compared to August 2011.

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“There’s still pent-up demand,” driving buyers back into showrooms, suggested Frank Trivieri, vice president of sales for Volkswagen of America, which reported a striking 62.5% year-over-year sales increase.

With products like the Elantra flying out the door, Hyundai (and sibling Kia) had the lowest industry incentives last month - but also the lowest average transaction prices.

Trend or just a temporary setback? In recent months, buyers have been steadily moving up-market while also adding significantly more content to the vehicles they buy. Along with cutbacks in the typical industry incentive package that has rapidly driven up the price motorists pay – the average transaction price, or ATP, in industry lingo.

But while January saw a surge in sales, preliminary data suggest they may also be reining in their spending by focusing on lower-priced, less lavishly-equipped models.

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Including cars, light trucks and crossovers, the typical motorist spent $30,512 in January, according to car pricing information tracked by TrueCar.com, a 0.6% decline from December. But while that’s a notably reversal of recent trends, it doesn’t appear to signal an end to the industry’s current upward momentum, analysts stress.

With supplies low on models like the Elantra, Hyundai was one maker able to slash incentives last month.

While only a handful of manufacturers have so far released their September sales numbers, the figures could provide some rare good news for an economy teetering towards another recession. General Motors Co., Chrysler Group and Volkswagen have all reported double-digit sales increases for September despite the uncertain economic climate that has prevailed during the last few months.

VW led the way with a 36% sales increase, while Chrysler reported a 27% increase and GM said its sales increased 20% compared with September 2010.

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But there appears to be a downside: industry analysts are reporting that it appears incentives surged to their highest levels in a year, while transaction prices – what consumers actually pay for a specific vehicle – slumped sharply.

While a number of major carmakers have yet to report in, early indications suggest August auto sales exceeded even the more optimistic forecasts – despite fears of a double-dip recession and a hurricane that shut down much of the East Coast during the final weekend of the month.

Detroit’s automakers reported strong demand, especially for their more fuel-efficient models – as did Japan’s second-largest manufacturer, Nissan. But sales of pickups and SUVs also fared reasonably well, as Chrysler’s Jeep brand reported.

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“We’re carrying good momentum and we’re cautiously optimistic that we’ll see U.S. economic growth improve in the months ahead,” said Don Johnson, General Motors’ North American sales chief. During a media background briefing, Johnson suggested that, “Consumer are being cautious, yes, and appropriately so, but they are not retrenching.”

Chrysler is one of many makers upping incentives as the economy falters.

Chrysler is offering qualified customers the opportunity to skip payments for the first three months after they take delivery of a new 2011 or 2012 vehicle.

The “No Payment for 90 Days” program covers any Chrysler, Dodge, Jeep or Ram product – but not the new Fiat 500 – and is officially part of the maker’s annual summer clearance program. But industry observers suggest Chrysler, like its competitors, is ramping up incentives in a bid to keep momentum going as the U.S. economy shows signs of slipping back into recession.

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Notably, Chrysler announced it would step up its givebacks on a number of new 2012 models, including cash of $500 on a Chrysler 200 sedan, $1,000 on a Jeep Liberty, $500 on a Dodge Avenger or Journey, and as much as $1,500 on a Ram pickup.

Small cars, like the Hyundai Elantra, gained significant ground in April.

It was a big month for the auto industry, though the emphasis was on small cars.

General Motors, Ford Motor Co. along with Hyundai/Kia all posted substantial sales gains during April, Audi meanwhile reporting its best April ever, even as industry giant Toyota continued to stumble.

General Motors sales increased 27% in April, while Ford Motor Co. reported a 16% increase and Chrysler Group sales climbed 22%. Hyundai reported a whopping 40% sales gain as it continued to woo buyers from other big Asian brands – pushing its market share to a solid 5.7% for the month, triple what it held less than five years ago.

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All three domestic carmakers credited new models for their strong sales last month, primarily small cars like the new Chevrolet Cruze, which gained 180% over the old Chevy Cobalt. But there was still some strength left in large, luxury and muscle cars, like the Ford Mustang, which came on strong despite the run-up in fuel prices last month.

The improving car market is seen as a sign of an increasing healthy U.S. economy, though observers fret that if fuel prices get too high buyers might pull back in the months to come. That might also happen, according to analysts, if makers pull back even more on incentives. Overall, givebacks declined by about 4% in April, according to TrueCar.com, with some makers – notably Honda and Toyota – reducing their incentives by 17% or more.

"Nobody's buying," said Ford marketing czar Jim Farley, during the blizzards of early February.

It may have been frigid cold in much of the country, but things were only heating up inside the nation’s new car showrooms, this month. Despite blizzards that led to a slow start, car sales for February will wind up well into the plus column, according to a preliminary report by J.D. Power and Associates.

Using data from dealers across the U.S., the research firm estimates sales will come in about 17.3% above year-ago levels – and 11.7% above January sales.

That’s a significant turnaround in just a matter of weeks. Speaking to TheDetroitBureau.com at the Chicago Auto Show, earlier in February, Ford’s global marketing chief Jim Farley lamented, “Nobody’s buying.”

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It didn’t help that much of the country was being hammered by frigid temperatures and a series of winter storms, but the Ford executive also worried that consumers were waiting for a new round of hefty incentives before signing on the dotted line.